Financial Results

In fiscal 2023, MyMichigan Health continued to navigate ongoing labor challenges while delivering high quality patient care and maintaining a primary
focus on the safety of its patients, providers, employees and communities. Patient volumes in most areas improved over the previous year activity, driving
increased revenues; however, expenses also increased resulting in a loss in overall operating performance from our core operations for fiscal 2023.
MyMichigan Health recognized $21.9 million of COVID related grants which helped to mitigate the continued financial impact of the pandemic and related
labor shortages. MyMichigan Health’s financial condition remains very strong. This strength results from the underlying conservative principles we use to
manage our assets and liabilities.

These principles include: 2023 (in millions)

n Strong Liquidity: Revenue (Amount We Charge for Our Services)
We have more than $1.0 billion in investments at June 30, For Patient Care and Other $3,459
2023, or the equivalent of approximately 293 Days Cash on Revenue Provisions (2,123)
Hand. We remain significantly above our target, which will
help us to withstand the many uncertainties that we face Total Operating Revenue
in the healthcare industry. (Amount We Receive from the Fees We Charge) 1,336
Expenses
n Investment in Facilities and Technology:
(What It Costs to Provide Services to Our Patients)
In fiscal 2023, we invested more than $31 million for the
construction of the James T. and Elsa U. Pardee Cancer Provide Compensation and Benefits to Our Employees 686
Wellness Center (Pardee Cancer Center) in Midland. The Pay Supplies, Insurance, Utilities and Other Services 555
Pardee Cancer Center project is expected to be completed in
Invest in Facilities and Equipment (Depreciation and Interest) 82
fiscal 2024, with the total investment estimated at $62
million. In Alma, $13 million was invested in Alma’s Ongoing Cost of Providing Services to Our Patients 1,323
Perioperative Services Project during the fiscal year. This Operating Income From Our Core Operations 13
project is also expected to be completed in fiscal 2024, with (Amount Left After Paying Expenses)
a total investment of $26 million. An investment of nearly $9
million was made in fiscal 2023 for MyMichigan Health Park
In Addition, We Received Interest Income and
West Branch which opened in March 2023 for a total Realized Gains on Investments 17
investment of over $11 million. Funds Available for Reinvesting in
Programs, Equipment and Facilities 30
n Net Revenue Reserves:
We continue to be appropriately conservative in how we Inherent Contribution Sault Addition
record net patient care revenue and maintain appropriate Other Income 3
reserves for changes in estimates with respect to billing and Unrealized Market Adjustments for Investments 57
third-party payor audits.
Pension Curtailment/Settlement (5)
n Conservative Funding of Our Pension Plan:
UMH Exit Fee (93)
We have continued to fund our pension plans
in excess of our requirements, contributing TOTAL (LOSS)/INCOME $(8)
$5 million to the plans in fiscal 2023. This
has allowed us to continue to move towards
our goal of aligning all retirement plans into 2023 (in millions)
a single retirement plan that is flexible and
Charity Care: Contributions to Our Communities’ Health
easy for employees to understand.
Charity Care at Cost $15
n Strong Capital Structure:
Our debt-to-capitalization ratio of 24.3% as of Cost of Unreimbursed Medicare, Medicaid, and other public programs 86
June 30, 2023 continues to be lower than most Cost of Price Concessions 21
organizations our size.
Total Cost of Uncompensated Care 122
Cost of Community Benefit 6
Total Contributions to Our Communities’ Health $128

1 of 2
 Financial Results Continued

In fiscal 2023, net patient service revenue showed

growth over the prior year. Higher patient volumes Where We Receive Our Funds
and a full fiscal year of MyMichigan Medical
Center Sault (compared to only 6 months in fiscal
2022) had a positive impact on net patient service Providers: 11%
revenue. Also included in income was the
recognition of COVID related grants in the amount
of $21.9 million which brought total operating
revenue for the year to $1.3 billion. Inpatient: 24%

Fiscal 2023 operating results included the

following significant expense-related items:
n Impact of the addition of MyMichigan Medical Outpatient: 65%
Center Sault midway through fiscal 2022,
resulting in higher fiscal 2023 expenses of
$72.5 million;
n Impact of higher productive wages related to
How We Put Our Funds to Work
higher patient volumes as well as non-produc-
Supplies, Insurance, Utilities & Other Services: 42%
tive wages related to incentive: $72.3 million
(compensation and related benefits);
n Higher patient-related supplies, including
patient-related pharmaceutical expenses:
$15.4 million; and
n Impact of increased travel, contract services,
and maintenance contracts, offset by lower
contract labor utilized in fiscal 2023: $7.6 Facilities & Equipment: 6% Compensation & Benefits: 52%
million.
Fiscal 2023 included the following significant,
non-recurring items: Capital Investment
n Recognition of $21.9 million of COVID related (Money We Reinvest in Our Facilities, Technology and Equipment)
grants that favorably impacted our financial (in millions)
results;
n One-time, non-cash settlement charge related $102
to pension remeasurement of $5.3 million; and
$90
n One-time UMH exit fee of $92.5 million.
$79
Overall, MyMichigan Health reported a Total
Loss of approximately $8 million, which includes $65
$57 million of unrealized investment gains as $56 $58
well as the one-time items listed above. Total
Income, excluding unrealized investment gains
and the non-recurring items listed above was
$11 million. As a not-for-profit, we reinvest our
“Total Income” back into our communities to
fund capital improvements, improve patient
care, invest in our employees, and implement
technology. This allows us to continue to
provide excellent health services to the people FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
in our communities and fulfill our purpose of
“Creating Healthy Communities – Together.”
2 of 2